Harry Browne/Ray Dalio

[barrett]

Apologies if a link to this interview has been posted before:

https://www.youtube.com/watch?v=SFaRazMpxcM

Of particular interest to anyone interested in the PP is the section from 47:15 to 51:45.

I found myself wondering who first came up with the concept of thinking about allocating assets based on being agnostic about the future. Harry Browne was having books published by the time Ray Dalio was finishing up college. To the best of anyone's knowledge, did either of them ever site the work of the other?

[MachineGhost]

Dalio certainly hasn't.  I dunno about Browne.

[craigr]

I think Browne and his team (Terry Coxon, John Chandler, and Charlie Smith[?]) likely came up with the concept first. Harry Browne certainly publicized it first. The backstory about it from John Chandler is that Harry Browne was quite a computer buff. In the 1970s he was playing around with models of the portfolio idea and maybe even paid money to do some in-depth computer analysis of historical market data to prove/disprove the ideas they were developing. I asked John one time if they still had the original analysis data they had used, but he didn't.

What I know for certain is if you don't allocate based on an agnostic future you have made a serious tactical error with your investments.

[4x4]

I wondered about the relationship after a friend sent me one of his papers, which I am not finding now.  He called his "The All Weather Portfolio" as per the below quote.  The paper quoted even has a nice 4x4 graphic square...

"The All Weather approach exploits these reliable relationships by holding similar risk exposure to assets that do well when (1) growth rises, (2) growth falls, (3) inflation rises, and (4) inflation falls (all relative to expectations), through four sub?portfolios which are designed to capture these four risk exposures. We spread our risk evenly across these four sub?portfolios because we do not assume that the market has any systematic tendency to over? or under?discount future growth and inflation."

http://www.bwater.com/ViewDocument.aspx?f=76
If the link does not work, try https://www.bwater.com/home/disclaimer--agreement.aspx, click on the risk balance paper.    - VERY SIMILAR to PP IMHO

[4x4]

From Wikipedia

"The fund is reported to contain: 30% Stocks (for instance, the S&P 500 or other indexes for further diversification in this basket) 15% Intermediate Term Treasuries IEF (7- to 10-year Treasuries) 40% Long Term Treaasuries TLT [20- to 25-year Treasuries] 7.5% Gold IAU 7.5% Commodities [52]"

[barrett]

From Wikipedia

"The fund is reported to contain: 30% Stocks (for instance, the S&P 500 or other indexes for further diversification in this basket) 15% Intermediate Term Treasuries IEF (7- to 10-year Treasuries) 40% Long Term Treaasuries TLT [20- to 25-year Treasuries] 7.5% Gold IAU 7.5% Commodities [52]"

Right. That is what I have heard/read as well. But, in the link I posted, he doesn't say anything about other commodities, he only mentions gold. He also clearly lays out his four quadrants with one of them being "long-duration bonds." I wouldn't consider 7 to 10-year treasuries as "long duration." In this video, although he doesn't give specific percentages, he is talking about a PP for all practical purposes. Dalio is obviously smart and articulate and apparently has a great track record. I'm guessing that what he does for his customers is probably a lot more complicated in terms of hedging techniques/math, etc. but credit where it is due. Of course it's always possible for two people to hit upon the same idea at roughly the same time.